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Miami Herald
22-05-2025
- Business
- Miami Herald
Historic college suffers financial collapse after bankruptcy
For those of us who attended college, there's often a feeling of pride and nostalgia around our alma mater, as it served as the bridge between our youth and our adult lives. While it's not for everyone, many people deeply enjoy going to college reunions and seeing old friends and teachers, catching up, and looking back on fond memories. It can also be deeply rewarding to learn how our old contacts have changed over time. Don't be surprised if you feel a glow of pride when you learn that the girl who sat behind you in algebra now has her Ph.D., or that guy on your soccer team has since joined Manchester United. Don't miss the move: Subscribe to TheStreet's free daily newsletter Many people often feel that the college they attended is a key part of who they are, helping to shape their lives in a significant way. It's part of the reason going back after 20 years away can be meaningful for so many. Related: Troubled radio station company files for Chapter 15 bankruptcy However, not all colleges remain the same after we leave. A sad story has emerged about a historic private school that served an important sector of the population in Oklahoma, and both staff and students are mourning the loss. Image source: Bacone College Facebook Bacone College, originally chartered by the Muskogee (Creek) Nation in 1881, will be forced to follow an order on May 22 to "turn over all keys and control" of the school by 11 a.m. This news comes almost a year after Bacone originally tried to declare Chapter 11 bankruptcy in June 2024. However, U.S. trustee Ilene Lashinsky, who was assigned to the bankruptcy case, argued that untoward financial activity had taken place at the historic institution and made a motion that the bankruptcy be shifted to Chapter 7. Lashinsky's filing called the college's actions "gross mismanagement of the estate." Related: Key healthcare company files for Chapter 11 bankruptcy In the filing, Lashinsky explains that a payment of $16,500 was made by the college to the Small Business Administration to pay a loan owed by Leslie Hannah. Hannah became president of Bacone in April 2024, indicating that Hannah used the college's funds to pay his SBA debt. According to Hannah, he got an SBA loan in the amount of $15,000 before the college filed for bankruptcy to pay the college's payroll. But Hannah and the SBA were not listed among his creditors when the college filed for bankruptcy. In 2023, an auction was planned to help pay off some of the school's debt from a lawsuit, but the auction was then canceled. In its 144-year history, Bacone served a large number of American Indian students with a focus on what it calls a "quality, holistic, liberal art, educational experience." Bacone also frequently provided financial aid for its students via grants, such as the $95,000 contributed from the National Society Daughters of the American Revolution in 2020. Amanda Swope, the Director of Tribal Policy & Partnerships with the City of Tulsa, told KTUL in an interview that she's sad to hear the news about this historic school. "It's certainly unfortunate. You know, not only it takes away an option from students and people in the rural part of Oklahoma that are seeking higher education, but, you know, Bacone was really such a mecca and a well-known university in Indian Country, and for Native students in particular," said Swope. Related: Struggling airline restructures debt, plans to exit bankruptcy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
17-05-2025
- Business
- Yahoo
‘Gross mismanagement': Bacone College sent into liquidation
This story was originally published on Higher Ed Dive. To receive daily news and insights, subscribe to our free daily Higher Ed Dive newsletter. A federal judge ordered Bacone College into Chapter 7 bankruptcy Tuesday, kicking into motion a court-managed liquidation process for the institution's assets. The private Oklahoma college, which describes itself as American Indian-serving, filed for bankruptcy last June with the aim of managing its debts and staying open in some form. Last week, a U.S. bankruptcy trustee moved that the case be converted to a Chapter 7 case, citing 'gross mismanagement' by college officials, one of whom the trustee alleged used the institution's bank account to pay his personal expenses. In a short but blistering court filing, Ilene Lashinsky, a U.S. trustee with the U.S. Department of Justice assigned to the bankruptcy case, argued that untoward financial activity at Bacone warranted the conversion to Chapter 7 bankruptcy, effectively forcing the college into a full wind-down. Specifically, the trustee pointed to a payment of nearly $16,500 made by the college to the federal Small Business Administration to pay a loan owed by Leslie Hannah, who became acting president of Bacone in April 2024. The payment, according to Lashinsky, was made at Hannah's direction to pay his SBA debt. Hannah did not immediately reply to a request for comment Thursday, nor did the college's bankruptcy attorney. Lashinsky said that 'Hannah claims that he, in his personal capacity, obtained an SBA loan prior to the Debtor's bankruptcy filing in the approximate amount of $15,000' to pay the college's payroll. But neither Hannah nor the SBA was listed among Bacone's creditors when the college filed for bankruptcy last June. Also named in Lashinsky's filing was Josh Johns, a board member of the college, whom Bacone listed as overseeing the institution during bankruptcy along with Hannah. 'It is unclear whether Hannah discussed this payment with Johns but neither Hannah nor Johns did anything to prevent this payment to the SBA,' Lashinsky said. Lashinsky also cited the college's failure to provide timely financial information. 'This case is stagnant and the Debtor's only hope is that an investor may come in and purchase the real estate assets of [Bacone],' Lashinsky said in the filing. 'This is the best option for creditors to get paid.' The college's property is valued at $3.8 million, according to court documents. Bacone's history stretches back to 1880, when it was established on land donated by the Muscogee Nation to the American Baptist Church. It was meant to provide a Christian education to Native American students. The American Baptist Home Mission Society had the final say on decisions of the college until the 1950s. After years of financial struggles, Bacone filed for bankruptcy last June and stopped taking new students after graduating nine that May, according to The Oklahoman. Days after it filed, the Higher Learning Commission pulled accreditation for the college, citing noncompliance with several criteria. Before that, amid reports that it was in deep distress, the college posted on its website in bold type that that Bacone 'is not closing and plans to graduate another class of our outstanding students again this May.' 'The Board of Trustees are committed to the future of this historic college, and believe that Bacone will continue to provide a quality education for our students for decades to come,' the college said then. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
Bacone College ordered to liquidate assets
A U.S. bankruptcy judge ordered Bacone College assets be liquidated to pay outstanding debts. Judge Paul R. Thomas' ruling Tuesday effectively ends the 145-year history of the Native American college. Bacone College Acting President Leslie Hannah said this is a sad ending to the college. 'My understanding is this is the death of Bacone,' Hannah said. 'Ron (Brown, attorney representing the college) told me to not pay any more bills, to not write any more checks. To cease all operations.' Bacone's demise stems from a lawsuit, filed in 2021, alleging the college owed $1,038,500 to MHEC LLC, doing business as Midgley-Huber Energy Concepts. Bacone had attempted to reorganize its debts under bankruptcy laws in order to continue as a higher eduction facility. Thomas' order changed Bacone's status from Chapter 11 to Chapter 7. The United States Courts website says Chapter 11 bankruptcy 'generally provides for reorganization.' The website says Chapter 7 'provides for 'liquidation' — the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.' Liquidation is the process of bringing a business to an end and distributing its assets to claimants. Hannah said he received a phone call Tuesday morning from Ron Brown, a bankruptcy attorney representing Bacone, telling him of the ruling. 'Ron said 'I've got bad news and maybe some good news,' Hannah said. 'The way he said it it was kind of a joke. I've been talking with him about it and I said 'I'm exhausted by all of this.' 'He said 'Well the good news is maybe you can finally get some rest. Pretty much it's over.'' Bacone College, formerly The Indian University, was founded in 1880 to educate Native American students. The history of the college on its website that Muscogee (Creek) Nation donated land to the American Baptist Church and the American Baptist Home Mission Societies to establish Bacone College. Bacone suspended classes for the Spring 2024 semester except for the students that were set to graduate that semester. The last full semester was the fall of 2023. Judge Thomas said in his ruling, 'It is hereby ordered that the motion to convert case to Chapter 7 filed by MHEC is granted, and this case is hereby converted to Chapter 7.' Bacone attempted to sell 70 of its 160 acres in 2024 to satisfy its debt bending from the lawsuit. Hannah said the sale fell through. An auction and a sheriff's sale of the college were scheduled for 2023, but both sales were called off by MHEC.
